Correlation Between VersaBank and Olympia Financial
Can any of the company-specific risk be diversified away by investing in both VersaBank and Olympia Financial at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining VersaBank and Olympia Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VersaBank and Olympia Financial Group, you can compare the effects of market volatilities on VersaBank and Olympia Financial and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in VersaBank with a short position of Olympia Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of VersaBank and Olympia Financial.
Diversification Opportunities for VersaBank and Olympia Financial
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between VersaBank and Olympia is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding VersaBank and Olympia Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Olympia Financial and VersaBank is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on VersaBank are associated (or correlated) with Olympia Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Olympia Financial has no effect on the direction of VersaBank i.e., VersaBank and Olympia Financial go up and down completely randomly.
Pair Corralation between VersaBank and Olympia Financial
Assuming the 90 days trading horizon VersaBank is expected to generate 0.98 times more return on investment than Olympia Financial. However, VersaBank is 1.03 times less risky than Olympia Financial. It trades about 0.09 of its potential returns per unit of risk. Olympia Financial Group is currently generating about 0.06 per unit of risk. If you would invest 998.00 in VersaBank on September 14, 2024 and sell it today you would earn a total of 1,230 from holding VersaBank or generate 123.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
VersaBank vs. Olympia Financial Group
Performance |
| Timeline |
| VersaBank |
| Olympia Financial |
VersaBank and Olympia Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VersaBank and Olympia Financial
The main advantage of trading using opposite VersaBank and Olympia Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VersaBank position performs unexpectedly, Olympia Financial can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Olympia Financial will offset losses from the drop in Olympia Financial's long position.| VersaBank vs. Sylogist | VersaBank vs. Sangoma Technologies Corp | VersaBank vs. Firan Technology Group | VersaBank vs. Hammond Power Solutions |
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Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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